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INTRODUCTION OF GATT

General Agreement on Tariffs and Trade(GATT)wasa


multilateralagreementregulatinginternationaltrade.

Itwascreatedin1948withtheaimofbolsteringinternational
tradebyreducingtradebarriersbetweencountriesthrough
negotiations.

GATTwassignedby23nationsinGenevaonOctober30,1947
andtookeffectonJanuary1,1948.
Itisone-thirdoftheBrettonWoodssystemthatwascreated
afterWorldWarIItoensureastabletradeandeconomicworld
environment.

ThelastroundofGATTwasheldinUrugaryin1993beforeit
transformedintoWTO.

ItwasreplacedbyWTOin1995afterprolongeddeliberations
thatcontinuedforeightyearsinGATT.
COMPARISION
WORLD TRADE GENERAL AGREEMENT
ORGANIZATION
ORGANIZATION: OF TRADE AND TARIFF

Ithaslegallypermanent ORGANIZATION:
provision. Ithadaprovisionallegal
MEMBERS: agreement.
TherealmembersinWTO. MEMBERS:
SCOPE: Thememberswerecalled
ThescopeofWTOis contractingpartiesinGATT.
broaderwithservicesand SCOPE:
intellectualpropertyrights Itwaslimitedtotradein
goodsonly.

CONTD..
WTO GATT

POWER: POWER :
It is more powerful. It was weak.
DOMESTIC DOMESTIC
LEGISLATION : LEGISLATION :
It does not permit this It allowed domestic
practice anymore. legislation to continue.
INRTODUCTION OF WTO
TheWorld Trade Organization(WTO)is
anintergovernmentalorganizationwhich
regulatesinternationaltrade.
TheWTOofficiallycommencedon1January1995
undertheMarrakeshAgreement,signedby123
nationson15April1994,replacingtheGeneral
AgreementonTariffsandTrade(GATT),which
commencedin1948.
Toincreasetheproductionandtradeofgoodsand
services.
CONTD..
There are more than 125 members of WTO,
and more than 90% of total international trade is
governed by the rules of WTO.
WTO has much stronger provisions for
enforcement of the rules.
This round reduced the tariffs by 40 % and
initiatedagricultural subsidies
WHY DID WTO REPLACE
GATT
GATTwas working very efficiently but powerful members
ofGATTdecided to replace it with some globallevelregulating and
governing authority. This became the reason for creation of WTO. This
happened for various reasons. First of all,GATTwasapplicableonly on
trading of merchandised goods. But WTO covers trading of services
andIntellectualpropertiesalongwiththemerchandisedgoods.GATTwas
highly bureaucratic structure, on the other hand WTO is faster in
implementation of internationalagreementsand WTO enjoys more
authoritywhileresolvingthedisputesbetweenmembercountries.
CONTD..
Beyondtheabovementionedoperationalandpracticalreasons,
varioussymbolicandphilosophicalreasonsalsoparticipatedin
replacementofGATTwithWTO.GATTwasactuallyjustaset
ofinstructionsandrules,withnoorganizationalorinstitutional
foundation.Therewasnocentralbodytoregulatethe
functioningofGATTanditsmembercountries.Ontheother
handWTOisapermanentfull-fledgedinternationalinstitution
withitsownindependentsecretariat.
CONTD.
Moreover,GATTagreementsweresubjecttothewillingness
ofmembercountriestoimplementit.Itwasquitepossiblethat
oneormoremembercountriesrefusedtoimplementthe
signedagreementssimplyduetovariousmiscellaneouslocal
reasonsandnoonewastheretoaccounttheirresponsibilityof
implementation.ButcommitmentsofWTOarepermanentand
reliable.